Deutsche Bank buys 4.9 pct stake in Leumi - papers

JERUSALEM, June 23 (Reuters) - Deutsche Bank (DBKGn.DE) has bought Cerberus Capital Management [CBS.UL] and Gabriel Capital Corp's remaining 4.9 percent stake in Bank Leumi (LUMI.TA), Israeli financial newspapers reported on Tuesday.

Deutsche Bank's office in Tel Aviv declined to comment.

Cerberus and Gabriel last month sold a 4.83 percent stake in Israel's largest bank to the Azrieli Group for 740 million shekels ($186 million), or 10.5 shekels per share.

Leumi shares were down 3.2 percent at 9.67 shekels at midday.

The Globes business newspaper said Deutsche Bank paid 9.5 shekels a share for 67.8 million Leumi shares for 648 million shekels, a 4.5 percent discount to Monday's closing price of 9.99 shekels.

As part of the government's privatisation programme, Cerberus and Gabriel together bought a nearly 10 percent stake in Leumi from the state in 2005 at 16.5 shekels a share.

Newspapers have said Cerberus and Gabriel decided to sell their stake jointly to boost liquidity in the wake of the global financial crisis and the Bernard Madoff scandal.

Money management firm Gabriel is run by Ezra Merkin, who has been charged by New York's attorney general with secretly placing $2.4 billion of client funds with swindler Madoff.

Madoff pleaded guilty in March to running Wall Street's biggest investment fraud involving as much as $65 billion over 20 years, including billions from feeder funds like Merkin's. (Reporting by Joseph Nasr; Editing by Dan Lalor)